They say the tax bill needs to treat big companies and small- and medium-sized businesses more equally.

The legislation would permanently reduce the tax rate for big companies classified as C corporations to 20 percent while setting a top effective tax rate for many small businesses at 32 percent. The special rate for those “pass-through” companies, whose income is taxed through the individual tax code, would expire after 2025.

Johnson and Daines want to increase the deduction available to small businesses, which the Senate bill now sets at 17.4 percent, by not allowing big companies to deduct state and local taxes.

ADVERTISEMENT

Daines estimates it would raise between $100 billion and $200 billion, and Johnson says that would be enough to achieve acceptable tax parity between big companies and mid-sized and small businesses.

“Let’s treat all businesses equal when it comes to state and local tax deductions. We’re disallowing it for individuals, we’re disallowing for pass-throughs, we should disallow it for C corps,” Johnson said Monday evening.